UK energy generators face tax raid on soaring profits
Dressed in overalls with “leave it in the ground” scrawled on their backs, climate protesters shovelled coal over the side of a goods train bound for the Drax power station in 2008.
It is now 14 years on from the train “hijack” and government officials are considering their own raid on the North Yorkshire power station – this time on the company’s finances.
The power giant, Britain’s single-biggest source of carbon emissions – thanks to the biomass and coal it burns – has benefited handsomely from the link between electricity prices and soaring gas prices, along with a group of nuclear plants and older solar and windfarm projects.
This windfall – evident in a quadrupling of profits – has thrust Drax and its fellow generators, which are propped up by historic subsidies, into the eye of a gathering storm.
With households and small businesses crushed by soaring bills, the government is considering options to break the link between gas and electricity prices as well as a windfall tax on electricity generators.
The plan could be one of Kwasi Kwarteng’s first acts as chancellor if, as expected, he is promoted from business secretary by the UK’s new prime minister, Liz Truss.
Germany’s decision to impose a windfall tax on electricity generators may embolden ministers to follow suit. Earlier this year, as the government imposed the Energy Profits Levy (EPL) on North Sea oil and gas operators, a similar measure was mooted for electricity generators – but was dismissed as too complex.
A further leaked Treasury analysis claimed gas producers and electricity generators could make £170bn in excess profits over two years. For most companies, precise figures on windfall profits are hard to come by.
But for Drax it is clear that the good times
Read more on theguardian.com
